Banks Support RBI Proposal for 1-Hour Digital Payment Delay, Seeks ₹25,000 Threshold Limit

As per news reports, Banks have largely supported the Reserve Bank of India’s proposal to introduce a delay for certain digital fund transfers to check rising online fraud. However, lenders have suggested that the proposed threshold of ₹10,000 should be increased to ₹25,000. 

The proposal was included in the RBI’s discussion paper on digital payment fraud released in April. Feedback from banks, payment firms and industry bodies was invited until May 8. 

Fraud Data Behind RBI Proposal 

The RBI said transactions above ₹10,000 account for around 45% of digital payment fraud cases by volume and 98.5% by value. The value of such frauds has risen nearly 41 times over the last 5 years to about ₹23,000 crore. 

Under the proposal, account-to-account transfers above ₹10,000 through digital payment systems would face a 1-hour delay before the amount is credited to the beneficiary account. 

The discussion paper also suggested additional safeguards, including tighter checks on accounts receiving large credits and added authentication measures for vulnerable users. 

Industry Flags Operational Challenges 

Industry participants have raised concerns about the practical implementation of some measures. The Self-Regulated PSO Association (SRPSOA), representing payment system operators, has submitted its feedback to the RBI. 

According to reports, the proposed delay currently applies only to peer-to-peer transfers. Participants said fraud activity could shift towards peer-to-merchant transactions if similar checks are not extended there. 

Concerns were also raised over delays in genuine transactions and operational issues linked to whitelisting beneficiary accounts. 

Banks Seek Higher Threshold 

Banking executives said there is broad agreement on the need to strengthen fraud controls, though some believe the ₹10,000 limit may be too low given the volume of routine digital transactions. 

Bankers also flagged concerns over another proposal in the discussion paper that suggested a ₹25 lakh annual aggregate credit ceiling for bank accounts.  

According to industry participants, such a limit may be difficult to implement operationally across banks. 

Read More: RBI Imposes Penalties on 2 Cooperative Banks Over Compliance Lapses! 

RBI Yet to Take Final Decision 

The RBI has clarified that the discussion paper does not represent a final policy decision. Former RBI Deputy Governor T Rabi Sankar had said the proposals were intended to gather feedback from stakeholders and would be reviewed before any final framework is introduced. 

Conclusion 

Banks and payment firms have backed the need for additional fraud checks in digital transactions, while recommending revisions to the proposed transfer threshold and operational conditions outlined in the RBI discussion paper. 

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